Exelixis at RBC Capital Markets: Strategic Growth and Future Plans

On Tuesday, 20 May 2025, Exelixis (NASDAQ:EXEL) presented at the RBC Capital Markets Global Healthcare Conference 2025, outlining its robust growth trajectory and strategic outlook. The company highlighted its strong performance driven by Cabometyx (Cabo) and introduced future plans centered on zanzalutinib (Zanza). While Exelixis reported optimism, it also acknowledged challenges such as market maturity and pricing constraints.

Key Takeaways

• Exelixis is experiencing growth fueled by Cabometyx, especially in Renal Cell Carcinoma (RCC).
• The company aims for Zanza to reach $5 billion in peak sales by 2030.
• Exelixis raised its financial guidance due to Cabo’s strong performance.
• Strategic focus on capital allocation and differentiated programs to drive future growth.
• Upcoming pivotal data readouts for Zanza in colorectal and non-clear cell RCC cancers.

Financial Results

• Exelixis reported a strong quarter, driven by Cabo’s success in RCC.
• The company raised its guidance, projecting Cabo to become a $3 billion franchise by 2030.
• Growth is demand-driven with less emphasis on pricing due to IRA caps.
• The neuroendocrine tumor market presents a billion-dollar opportunity.

Operational Updates

• Cabo remains central to Exelixis’ operations, described as the "gas of the Exelixis engine."
• The ASCO GU update showcased five-year data supporting the Cabo and nivo combination.
• The commercial team is credited with maximizing market share gains.
• Zanza is undergoing six pivotal studies, with two significant readouts expected this year.

Future Outlook

• Exelixis aims to establish new standards of care in cancer treatment.
• Plans to identify and invest in the "next big drug," leveraging its strategic lens.
• Zanza is expected to grow significantly, with peak sales projected at $5 billion by 2030.
• The company is preparing for Cabo’s loss of exclusivity in January 2031.

Q&A Highlights

• Upcoming ASCO presentation will share pivotal data on Zanza.
• The company emphasized its focus on quality over quantity in capital allocation.
• Exelixis aims to outcompete by leveraging differentiated market opportunities.

In conclusion, Exelixis’ presentation at the RBC Capital Markets Global Healthcare Conference 2025 reflected a positive outlook, driven by strategic growth initiatives and a strong pipeline. For more detailed insights, readers are encouraged to refer to the full transcript.

Full transcript - RBC Capital Markets Global Healthcare Conference 2025:

Greg Renza, Biotech Analyst, RBC: RBC Global Healthcare Conference. My name is Greg Renza, one of the biotech analysts, and we’re pleased to be joined by Exelixis today. And and representing the company is is Andrew Peters, head of strategy, senior senior senior vice president. Andrew, always great

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: to see you. Thanks for being here. Thank you for the invite.

Greg Renza, Biotech Analyst, RBC: Certainly, a lot a lot to talk about. Exelixis reporting last week. Wanna get into some of the the the recap there and also what’s going on with Cabo and Zanza and, of course, the the pipeline. But maybe, Andrew, before we start, we can just have you provide us with

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: a brief introduction to the company, the the commercial, the pipeline. Yeah. Thank you again for the invite, and glad to be here. Great day of meetings so far, and looking forward to the the afternoon. Just as a reminder, I’m gonna be making some forward looking statements today, so please see relevant risks and disclosures in our regulatory filings.

So Exelixis, I I think, is in a little bit of a, you know, great position, fun position to be in in that we’re really kind of smacking that, you know, transition of the cabo business really humming along looking forward to couple of pivotal Zanza readouts later this year, and then really investing in the pipeline. And so what we talked about on the last earnings call last week was really kind of a good summary of all of those dynamics where really strong quarter from Cabo in the base business in RCC, really kind of just executing full speed ahead all cylinders in the net launch, and then looking ahead to first Zanza and colorectal as well as non clear cell RCC, executing on the other four pivotal studies that we’ve announced, and then really kind of from a pipeline perspective, identifying what that next big drug is gonna be that we want to invest in. One of the things that I think, you know, unfortunately differentiates us from a lot of our peers is we always say that we run Exlexis like a business and not a biotech. And so, you know, what we mean by that is we wanna be thoughtful about expense management, thoughtful about the programs that we invest in.

Are they gonna be differentiated? Are they gonna have that through line that we think kind of runs through cabo and Zanza and that they’re successful or hopefully successful because they’re generating differentiating data? Ultimately, our job as drug developers is to help patients and is to establish new standards of care in really devastating diseases like kidney cancer. So we believe that if we’re able to right shift the survival curve, right shift the PFS curve, that’s how we create value for patients, and that’s how we create value for shareholders. And so we wanna do that again and again and again.

We’ve done it with Cabo, you know, we’re gonna have a couple of card flips this year for Zanza. And then again, as I mentioned before, we want to understand and generate data quickly enough to identify what’s that next program that raises its hand and says invest in me. Whether it’s internal in our early stage program or whether it’s external from a business development perspective, we have the ability to execute, we have the financial capability certainly, and we have the right people, we have the right team to then say, okay, let’s kinda run full speed ahead. And so great time to be at Exelixis, a lot of momentum. You know, I think walking down the halls at the company right now, people are just really excited and, you know, we come in every day doing exactly what I mentioned, trying to establish a new standard of care and we wanna make sure that we’re doing everything we can to be successful in that mission.

Greg Renza, Biotech Analyst, RBC: Yeah. Yeah. With with the history and with the momentum that you’ve garnered from not just 2024, but but but prior to that, maybe it’s a disservice to to start with this recent quarter. But as you mentioned, you’ve you’ve come off a strong quarter with the top line strength, some good nice EPS performance as well. And this, as you alluded to, is really driven by, I think, a core strength with Cabo and RCC.

Maybe walk us through what’s working here, what’s driving that growth to continue to accrue the the market share.

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: Yeah. It’s certainly not a disservice to talk about Cabo. I mean, you know, it’s it’s what has defined us as a company, and, you know, we have a saying, Cabo is kind of the gas of the Xelixis engine. And so as Cabo continues to be successful commercially, that’s what fuels our ability to invest in Zanzan, our ability to invest in the pipeline, our ability to buy back shares. You know, all of those dynamics are certainly driven by kind of the continued success that we’ve had in those tailwinds from Cabo.

So as PJ and Mike and Chris talked about on the the earnings call last week, you know, really strong quarter. We were able to raise guidance on, you know, frankly, the strength of that base business looking ahead then to kind of the continued launch in neuroendocrine tumors with that new indication. You know, depending on who you ask, it’s either the data or the team, but it’s really both. You know, when I meet with PJ and his team, and it’s one of the things that really jumps out is we think we have a best in class commercial organization, not even necessarily in biotech, but in bi biopharma. What we’ve shown is the ability to continue to gain market share, continue to spread a message, spread a dataset that resonates with patients and physicians, and really make sure that we’re maximizing that opportunity in RCC.

You know, why is that? One, the data obviously help. ASCO GU, we had a five year update from the CheckMate 9ER study, which again we believe, you know, continues to show that the combination of cabo and nivo has generated best in class data of an IO TKI that offers a lot of favorable, you know, dynamics around that overall survival, you know, continuing signal continuing to to remain strong and, you know, things like quality of life and key secondary endpoints. Those are the sorts of things that have resonated and continue to resonate. The other thing that we’re doing and, you know, kind of we get this question a lot is, you know, most drug launches tend to hit steady state between five and seven quarters after approval, and we’re now, you know, ninety hour launch in 2021.

So we’re we’re well past that. And it really comes back to the data and then the team. You know, we have a team that is out there in the market seeing physicians, seeing customers every single day with a singular focus on how do we make sure, how do we maximize the patients who are getting cabozantinib as part of their journey at RCC. And so that kind of singular focus of the team not letting up, not kind of, you know, moving to this thing and this thing and this thing and kind of that shiny new toy dynamic that I think happens a lot in the industry. This is something that we’re particularly proud of.

And when we reflect on kind of the success we’ve had with with Cabo, it’s certainly about the data, but it’s certainly about the team as well. And so we’re gonna continue to kinda go full speed ahead and make sure that that message continues to to be out there.

Greg Renza, Biotech Analyst, RBC: Yeah. No. Mike, you and the team talk about being in the business of p values and building that that data that’s sort of a that’s rooted in building that that competitive moat, and and we see the the demand as a small molecule that folks wanna understand, know, the pricing dynamics and think about the contributions of how you’re navigating price and volume and maybe provide you the reassurance or at least some degree of color on those contributions for this current quarter and as it sort of translates to that that increase in

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: in Yeah. Certainly. So as as PJ has talked about, you know, in the last quarter and and prior calls, you know, the the vast majority of kind of the success we’ve had is demand based. Mhmm. You know, if you look at the dynamics kind of post IRA, pricing tends not to be as much of a contributor historically just because we’re kind of capped at at the rate of inflation.

And so it’s again kind of a demand based story, you know, certainly it’s everything that we just talked about kind of, you know, gaining four market share points or on TRX. Four points of of TRX growth is, you know, something that I think if you would have asked us two, three years ago, we’d be pleasantly surprised, let’s say, that we’re still doing that. And so we wanna do everything we can to make sure that that kind of demand based growth that really reflects, you know, patient and physician preference for cabo. We wanna just continue that.

Greg Renza, Biotech Analyst, RBC: Yeah. Great. Great. And then let’s segue into into neuroendocrine tumors then with with the indication expansion. As as you you mentioned, you’re full steam on on the launch, you know, for the the horizon of of the guide increase does not include that from our understanding as far as that opportunity, so maybe it’s it’s upside potential.

Maybe just starting with the cabinet results, how that how the results have suggested the competitive potential for Cabo in in in second line plus.

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: Yeah. So PJ on our earnings calls just has a a really nice slide, kind of a checkbox slide that I like to refer to when I think about the opportunity set for cabo and NETs. And it really shows that, you know, with such a heterogeneous disease and kind of the PNET and the EPNET, cabo has a label and a NCCN guideline recommendation that’s, you know, relatively broad. And because of that, we have an opportunity to, again, be a standard of care for these patients as part of their journey with neuroendocrine tumors. And so the breadth of that indication, the breadth of that opportunity set, we think aligns well kind of with the commercial opportunity.

If you look at some of the oral options that are available to patients, they have, you know, probably more of a limited utilization, whether it’s PNAT, EPNAT or, you know, some of the other dynamics there. But I think the other thing to keep in mind is voice share with both Sutent and everolimus and Captem all being generic. We’re really gonna be kind of the the dominant player from a physician education, from a, you know, just market dynamic perspective. And so I think that’s gonna be, again, an opportunity for us to really go out and, you know, provide that compelling message to customers, to physicians, to patients about the cabinet data, the breadth of the, you know, the the the breadth of the activity, the overall clinical benefit, the fact that, you know, candidly, anytime you see a PFS HR with a, you know, two and four in front of it across those two subsets, you know, that’s a a a good thing for patients. And so that voice share is something that I think is gonna be increasingly important as we think about the launch.

But again, it’s about the data and, you know, the cabinet data was a particularly strong dataset and it’s one that as we kind of go out to the market and ahead of the launch, did a lot of market share. It was a dataset that frankly really resonated. You know, we’ve talked in the past about a lot of the dynamics ahead of the launch around, you know, physician familiarity with cabo. So unlike, you know, a lot of drug launches, about 80 75 to 80% of prescribers already write cabo net prescribers already write cabo for another indication. So you have that inherent familiarity with cabo, and you don’t have that kind of learning curve, so to speak, of, you know, how to manage toxicities, how to, you know, think about different doses, the 40 versus the 60, all of those things that, you know, can sometimes slow a launch or just inherent part of any new product launch that’s built into the opportunity that we have with NET and why it’s been such a all hands on deck exercise for us.

And so when PJ talked about on the last earnings calls that we’ve seen something like 70% of the prescribers already. It’s because our field force has already been out in front of those customers and have that those relationships built in. And then the other, say, 20% who haven’t written cabo previously, the vast vast majority of those are actually co located in sites that our reps were already seeing. And so, you know, just walking down the hallways, seeing a new physician and here’s something new to talk about and, oh, by the way, you know, making sure that you saw that five year update in RCC. And so when we go out to talk about NET, we also see that as an opportunity to reinforce and emphasize kind of our messaging in kidney cancer.

Greg Renza, Biotech Analyst, RBC: Right. So we’ve got the data. We’ve got the familiarity. How do those components translate into the the revenues? And maybe remind us of the base assumptions on cabo’s opportunity revenue opportunity in in in that.

And, also, just getting a better sense of that contribution, it’s sounds like the the the the briskness with which the the familiarity can can actually, and the the execution can can translate to utility. Walk us through that that contribution for ’25 in the following years of that peak opportunity. Yeah. So we’re you know, what what we said on

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: the last call is, you know, one, we don’t give guidance on guidance, but, you know, we wanna make sure that we understand kind of the trajectory and and and slope of that launch curve before we give kind of a formal update about how it’s going. So kinda stay tuned there. But I think what we’ve talked about in the past is that kind of later line neuroendocrine tumor opportunity set. If you look at the utilization of the oral options right now using contemporaneous pricing, it’s about a billion dollar market. And so kind of the key question for us and for for our stakeholders is how much of that kind of billion dollars can we can we take?

On the third quarter call last year, after we had gotten kind of all of the and the dynamics behind us, we use this as an opportunity to kind of level set how we see the business. We talked about Cabo, and we talked about Zanza. On the Cabo side, we said that we, you know, expect it to grow by 2030 to a roughly $3,000,000,000 franchise. Certainly, a key part of that is continued momentum in the base business. Mhmm.

But obviously, launching a new indication like neuroendocrine tumors is gonna be a key contributor of that as well. And so that’s kinda how we see the the business evolving, and it’s just about, you know, execution at this point for kind of that cabo piece. Yep. And then I’m sure we’ll get to Zanza later on.

Greg Renza, Biotech Analyst, RBC: Let’s do it because on that call, you also spoke about the clinical strategy and Zanza’s development. I think the the aspiration was maybe 5,000,000,000 in projected peak for ZANZA. So maybe this is a good time for us to to ask you to highlight ZANZA’s differentiation from cabo and other TKIs and just the strategy that’s supporting that confidence of that that that 20 thirties 5,000,000,000 number.

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: Yeah. So kind of the the the key insider kind of the genesis of of Zanza, and I always get a kick out of this and of the the naming dynamics. So cabo is XL one eighty four originally. ZANZA is XL o nine two and half of of one eighty four. It really kinda plays into what we were focused on.

So cabo, as successful as it’s been and as many patients as it’s helped, and as a quick aside, I was in a meeting earlier this week or last week, and I’ve really heard a stat that jumped out to me that our supply chain team had talked about that I think a hundred million Cabo tablets had been given to patients or we’ve made a hundred million tablets. And it just kind of jumped out at me and just how important of a product Cabo has been from a a patient perspective in helping people live longer, you know, better lives with with cancer. But Cabo is kind of one Achilles heel, so to speak, is that it has a relatively long half life of around a hundred hours. And so the way that that translates to clinical management for patients is any patient who’s on a VEGF targeting TKI or any TKI candidly ultimately sees adverse events. And what you need to do is dose hold, dose reduce until resolution of symptoms.

But because of that long half life, it can be somewhat challenging from a practical clinical management of patients, when you’re giving it in combination with other things. So that dose hold period can you know, with that four day half life and accumulation of plasma can be ten days, two weeks, even longer. And so you can imagine that patients with active late stage metastatic cancer, you know, that can be challenging. So zanzalutinib was designed really to improve upon that half life profile. So we were able to engineer a metabolic liability into that core cabo scaffold in kind of the nonactive portion of that of that TKI to take the half life down from around hundred hours to a little under a day, twenty three hours.

And so while phenocopying the kinase inhibition profile and all of kind of the efficacy that we think really drives the the cabo success, And so it’s it’s really the the insight there was we thought we were pretty dialed in from an efficacy perspective, but from a user friendliness, from a combinability, and from hopefully and potentially a tolerability perspective can that shorter half life translate. And so that was kind of the the core genesis of the the ZANZA program. And all the data to date that we’ve shared, whether it’s the dose escalation or all of the emerging datasets has really shown that we’ve been successful from from that perspective. And so really kind of when we talk about differences between cabo and Zanzib, it’s primarily around that half life. Unsurprisingly, when you change half life, we have seen differences in things like tissue distribution into the tumor versus healthy norm normal tissue.

And, you know, is that potentially a driver for some of the early tolerability differences that we’ve seen? Maybe. You know, we’ll see in kind of the the the full data pivotal data when it’s out. That’s kind of when the cosmic truth for these things tends to tends to show its head. But that was kind of the the genesis of it.

When we thought about where we wanted to develop Zanza, what we recognized was that we had seen activity for cabo. There’s a monotherapy in combination in something like twenty twenty one different tumor types. But given our, you know, either financial constraints or operational constraints, they’ve chosen not to develop cabo there, which is why we saw an opportunity then with Zanza to move into what we think are areas of high unmet need, like third line plus colorectal cancer or frontline head and neck that had prior cabo datasets that pointed us in the direction of can a cabo like molecule with a shorter half life have the potential to be a new standard of care? And so if you look at the six ongoing or planned pivotal studies that we’ve had, three zero three, third line colorectal cancer, three zero four, non clear cell RCC, three zero five, frontline head and neck, two studies with Merck in combination with belzutafan, and then an earlier study in neuroendocrine tumors compared against everolimus, those are all areas that actually aren’t necessarily overlapping with cabo. And so we get this question a lot about, oh, how does, you know, Cabo versus Sanza differentiate?

If you look at kind of that $5,000,000,000 market set, there’s really not a whole lot of overlap between the two. And so it’s a it’s a it’s a strategy kind of by design and partly by luck that as we look ahead to kind of the cabo LOE in January 2031, we think that the with the ZANZA, we have the opportunity to kind of grow through that.

Greg Renza, Biotech Analyst, RBC: That’s a great summary, Andrew. And, you know, when it comes to, upcoming zero zero two stellar data, looks like ASCO presentations, maybe just talk about the derisking philosophy and when we think about benchmarks to to derisk ZANZA’s development in in in ClearCell, how maybe that can be parlayed or leveraged when you think about design for the, the ZANZA, BALZU defense study that you mentioned in collaboration with with Merck. So as you’ve laid this out, how do we think about the sequencing of derisking and and data informing next steps?

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: Yeah. I mean, you know, certainly excited to share the the ASCO data. What you’ll clearly see is it’s a very active drug. You know, from a derisking perspective, I’ll come back to, you know, you quoted Mike earlier saying, you know, we’re in the business of p values. And so, ultimately, when we think about ZANZA, not only in CRC or really ZANZA as a franchise molecule that we want to invest in, those derisking events candidly are the pivotal trials.

And so ASCO is certainly gonna be important for us this year, but we do have two pivotal readouts. First in colorectal cancer, you know, event based, so, you know, we’ll always see. And also with three zero four and non clear cell RCC. And so we’re gonna get two phase three randomized readouts from that program this year, and I think that’s ultimately gonna be the key derisking event for how we think about that franchise. You know, so what we wanna do is we have the six studies ongoing right now, and we wanna define that next wave of ZANZUS studies to say, okay, what are the opportunity sets that we think we have the ability to either in monotherapy or in combination define new standards of care with what we think is a differentiated and clearly or hopefully best in class TKI, user friendly, combinable, all of that stuff.

And so what we’ll see with those pivotal readouts this year is kind of that first derisking of how we think about the next wave and the next wave and the next wave. And on that point, you know, what we have talked about is either looking at the Merck collaboration as example or, you know, prior versions of that either with the contact trials or CheckMate with Bristol. We like that model of having clinical collaborators where we can risk share, where we can cost share, and so we can be capital efficient as we think about r and d.

Greg Renza, Biotech Analyst, RBC: Yeah.

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: And so coming back to nine e r, you know, we always joke that’s in

Greg Renza, Biotech Analyst, RBC: the ROI hall of fame.

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: You know, we were doing around 750,000,000 a year when that study read out. We’ve obviously been able to grow up from there. But the key point is that Bristol paid half and Ipsen and Takeda paid half of our half. And so that capital efficient investment, we wanna continue with Zanza and hopefully kind of with the the pipeline going forward.

Greg Renza, Biotech Analyst, RBC: Yeah. And and, of course, always the number one question I I wanted to spare you, but it’s in in the wheelhouse for you. So I just have to close with taking the the the value that’s created with with Cabo, investing in Zanza, but also the pipeline, and, frankly, external in innovation. So just, Andrew, a word on capital allocation. I know you’ve got the the the pitch of how you position that, but maybe one specific question is what comes around to Xcel’s, Xelixis’ approach to differentiation.

How can Xelixis and you outcompete other strategics? We know that you want high conviction assets. So do others. So what makes Exelixis searching eval different such that you can convert on on those goals?

Andrew Peters, Head of Strategy, Senior Vice President, Exelixis: I think we have slightly different goals. You know, I often there’s a difference between, say, a numbers game and a quality game. And we wanna make sure we have a quality game with a differentiated perspective. And one of the things we’ve talked about is we got Cabo back twice. So our larger pharma, biopharma peers don’t necessarily have a perfect crystal ball, but we we think we have ability to have a differentiated lens on, say, what a market opportunity is or what a biological, you know, hypothesis around a particular mechanism is.

And so we wanna make sure that we’re investing in the right things, asking the right questions, running the right studies because we don’t wanna bring in just another me too because, commercially, those tend not to be successful. We more want the next cabo versus the next, you know, ninth of whatever. So We’ll we’ll leave

Greg Renza, Biotech Analyst, RBC: it there. Andrew, thank you for joining. Thanks, everyone, for for joining. Look forward to ASCO. Yep.

Thanks again.

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